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The political events that followed the declaration of State of Emergency and COVID-19pandemic in Myanmar have significantly impacted businesses. In response to this, the State Administration Council and authorities have introduced several legislative changes and instructions in recent weeks.

This article provides a summary of the recent legal framework introduced by the Ministry of Commerce (“MOC”), the Directorate of Investment and Companies Administration (“DICA”), Myanmar Investment Commission (“MIC”) and the Central Bank of Myanmar (“CBM”).

1.  Announcement by the Myanmar Investment Commission on priority sectors

On 25 November 2021, MIC announced eight industry sectors that will be given priority for investment by foreign and Myanmar citizen investors during the MIC proposal application process. The announcement stipulates that MIC, the government of respective states and regions and ministries will provide necessary assistance to the investors submitting proposal in these sectors under the Myanmar Investment Law 2016. However, it is not clear from the announcement that what kind of necessary assistance or priority will be provided to the investors.

The eight priority sectors that MIC will prioritize under the announcement are the following:

(iii) Iron and Steel Manufacturing;

(iv) Agriculture, livestock farming and related industries;

(vii) Pharmaceutical and medical device manufacturing; and

2. Instruction by the Directorate of Investment and Company Administration for opening of corporate bank account

On 22 November 2021, DICA issued the Directive 136/2021 (“Directive 136/2021”), which instructs companies and organizations to open separate corporate bank account for financial transactions in the name of the registered company or organization in accordance with Section 5 (a) of the Myanmar Companies Law (“MCL”). The Directive 136/2021 provides that some companies and organizations formed under the MCL have been using bank account which were opened under the names of their directors to carry financial transactions rather than opening a separate corporate bank account under their name. Section 5(a) of the MCL provides that a company is a legal entity in its own right separate from its members, having full rights, powers and privileges. The Directive 136/2021 further clarifies that this Directive 136/2021 is applicable to all companies and organizations registered with DICA under the MCL.

3. Amendment by the Ministry of Commerce to the list of commodities allowed for wholesale and retail trading

On 12 November 2021, MOC issued the Newsletter 19/2021 (“Newsletter 19/2021”), specifying the amendment lists of prioritized commodities group which are allowed to be sold through wholesale and retail by foreign Myanmar - 2 - companies and companies established as a joint venture between Myanmar citizen and foreigner (“JV”), which may be reviewed and amended from time to time according to the needs of the Union of Myanmar. With the issuance of this Newsletter 19/2021, the Newsletter 3/2021 dated 26 July 2018 which contains a list of prioritized commodities which were allowed to be sold through wholesale and retail by foreign companies and JV companies was repealed.

There are 25 types of commodity lists under the Newsletter 19/2021 which are set out below:

(i) Consumer goods (including clothes, watches, and cosmetics);

(ii) Food products (including agricultural products except restricted products, marine products, animal products, ready-made foods, various types of beverage, domestically manufactured liquors, and raw material for food production);

(iii) Household goods (including ceramics, earthenware, and glassware);

(v) Medicine, medical devices and hospital equipment;

(vi) Animal feed and veterinary medicines;

(x) Communication products (including cameras and phones);

(xii) Construction materials and equipment;

(xiv) Chemicals for industrial manufacturing;

(xv) Materials used in industrial production and raw material for industrial production;

(xvi) Seeds, inputs for agriculture, and materials for agricultural use;

(xviii) Machines and related equipment;

(xx) Motorcycles and related equipment;

(xxi) Motor, vehicle spare parts and machinery spare parts;

(xxiii) Home decoration materials (including flowers and plants);

(xxiv) Souvenirs and hand-made goods; and

(xxv) Works of arts, musical instruments and related equipment, (not including antiques).

4. Amendment by the Ministry of Commerce to the lists of commodities requiring import license

On 9 November 2021, MOC issued Newsletter No.18/2021 (“Newsletter 18/2021”), providing the lists of commodities requiring import licenses to import into Myanmar. MOC previously provided 3,931 types of commodities requiring licenses by Notification 68/2020 dated 22 October 2020 of the MOC.

Under the Newsletter 18/2021, 3,070 types of commodities in relation to food products, pharmaceutical products, cosmetics, fertilizers, plastic products, consumer products, electronic, paper products and construction materials has been included in the list of commodities requiring import licenses. The requirement to apply import license for the 3,070 types of commodities under the Newsletter 18/2021 will be effective from 1 January 2022. As such, a total of 7,001 types of commodities will require to apply import licenses in order to be imported into Myanmar from 1 January 2022.

The Newsletter 18/2021 provides that the lists of commodities requiring import licenses in order to import into Myanmar will be further increased by the MOC in the future.

5. Amendment by the Central Bank of Myanmar on the Foreign Exchange Management Regulations

CBM issued the Notification 64/2021 on 10 November 2021 which amends Section 35 of the Foreign Exchange Management Regulations (2014) to stipulate that the holder of a foreign currency trading license shall inspect whether the exporter received export earnings within three months from the date of shipment of the goods according to the evidence of the actual exports.

The previous Section 35 before this amendment required the licensee of the foreign currency trading to verify whether exporters received the export earning into their bank accounts in Myanmar within six months from the date of shipment of goods.

6. Announcement by the Directorate of Investment and Companies Administration on visa application

DICA announced on 30 September 2021 that companies holding MIC Permit or MIC Endorsement can apply for stay permits, work permits and entry visas for foreign employees and their family members online from 11 October 2021 through the website: http://movas.dica.gov.mm. It is further mentioned that such applications, can only be processed online from 1 November 2021.

The detailed information on the application was updated on the above mentioned website and the required documents for the application are the same as the previous paper application.

It is difficult to predict what will happen in the short to medium term since the situation in Myanmar is fluid at the moment. In the view of that, businesses and investors should carefully continue to monitor the investment, developments, risks and operational challenges in the country in order to comply with the legal requirements and to avoid being exposed to penalties.

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